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Dram Shop Laws

Categories: Regulations

What do they do? They create an uncanny level of responsibility for any American business that sells alcohol.

These laws make businesses liable for harm caused by their patrons if the business provided alcohol to a patron who was obviously (or close to being) intoxicated. So if the tipsy guy who rode his lawnmower (because DUIs don’t apply to operating yard tools) to your Kwik-E-Mart to grab another six-pack rear-ends a hatchback on his way home, then the owner of the dinged hatchback gets to sue you. Oh yeah, and the lawnmower guy also gets to sue for selling him alcohol in the first place.

And yes, of course, these laws are the darling of oh-so-many ambulance chasing lawyers, many of whom owe a second home to its inspiration.

Find other enlightening terms in Shmoop Finance Genius Bar(f)